Invoice Factoring

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Sell Your Invoices

factoring needsAre you looking for a good answer to your company’s cash flow problems, especially one that doesn’t mean you have to give up ownership to an outside investor? Invoice factoring can be the solution. By selling your invoices you’ll generate immediate cash and keep TOTAL ownership of your company. You can meet payroll, pay bills, have cash on hand for raw materials and daily operations – easily and consistently.

Invoice factoring, also known as accounts receivable factoring, is the sale of a company’s invoices to a third party, the “factor.” Typically invoices are purchased as soon as they are generated and verified. The factoring company – Allegiant Business Finance – provides an advance, which is an agreed-upon percentage of your invoices’ face value, at the time of purchase. It helps your business establish stable cash flow without going through a cumbersome administrative process…even if your company is a startup or a relatively new company. Companies who have been in business for years can also benefit, and are welcome, as well.

How Does Invoice Factoring Work?

Advance rates vary, depending on the company’s industry, the creditworthiness of its customers, the size of its invoices, and factoring volume. 75 – 90% advances are the norm, though one should not necessarily expect to receive the upper end of these numbers. After purchasing invoices, Allegiant waits for and receives its payment directly from its your customers. This practice places both you and Allegiant in a mutually beneficial relationship. As your company grows and your income increases (which factoring enables), the Allegiant’s income increases right along with yours.

Factoring ProcessThe Factoring Process Flow Chart

Detailed Steps to Sell Your Invoices

  1. Complete an application and submit it to Allegiant with a copy of your accounts receivable aging schedule.
  2. Allegiant gives preliminary approval and quotes terms subject to formal due diligence.
  3. After you accept the terms, Allegiant completes a formal credit review of your company, your customers, and your personal credit.
  4. Assuming both Allegiant and you wish to proceed, Allegiant provides a Purchase and Sales Agreement with an Assignment and Notification Letter.
  5. Both parties sign and execute the Purchase and Sale Agreement, thus enabling the purchase of your accounts receivable.
  6. Your customers are notified of the new payment address.
  7. When Allegiant collects the payment of the invoices, the balance of the invoice, called the reserve, is remitted back to you less the factoring fee.
  8. Allegiant provides you with regular statements of activity on the accounts. Future invoices are purchased within 24 hours of Allegiant’s receiving the invoices from you.
  9. We have 24/7 online access to multiple credit resources and databases. We use these sources to assist with reviewing and establishing credit limits for your client base.
  10. Your dedicated Account Executive will work with your company, providing assistance with collection calls, invoice mailings, follow up, payment processing, and credit monitoring.
  11. With 24/7 online access to your account, you can go online and monitor your factored invoices and balances any time you like. You can also set up online access for whomever you designate from your company. You will never be out of touch with your accounts receivable!

Benefits of Invoice Financing

  • Improved cash flow happens fast, once your account is established. We provide funding in 24 hours from the time of invoice submission.
  • Flexibility. you can select which invoices and/or customers you want to factor. While some factors require factoring all your invoices, we do not. With Allegiant you can sell whichever invoices you choose in order to maintain the steady cash flow you need.
  • Factoring can enable your business to give terms to customers you couldn’t before, which in turn leads to potential new markets and increased sales.
  • The application process is much shorter and includes fewer requirements than bank loans.
  • Read more on our blog, “10 Reasons to Factor Your Invoices“.

Qualifications Required for Factoring Your Invoices

  • You must have a business that has invoices to business or government customers.
  • Your customers must be creditworthy and pay their bills dependably, usually in about 30-60 days (though this can vary).
  • Factored invoices must be verifiable and unencumbered (not used to meet other obligations).
  • You should not have serious tax arrearages, unresolved judgments, or liens with other financial companies such as banks.

Why Choose Allegiant?

  • Why Choose Allegiant?We fund companies nationwide with monthly invoice volumes of $30,000 to $3,000,000+.
  • We provide advance rates of up to 90% on gross billings, giving you immediate access to your invoice receipts long before your customers pay them.
  • We utilize a lockbox for receiving customer check payments, and accept ACH payments from your customers, for quick cash transactions.
  • We provide funding via Electronic Funds Transfer (EFT) so you don’t need to wait for a check.
  • We provide a “Proof of Funding” certificate, enabling you to accept large orders and RFPs.
  • We allow your sales force to say “YES” to large orders and profitable new business.
  • You get the lowest factoring cost and highest value for your invoices.
  • You select which invoices you want to factor (not all factors will allow this).

Summary

Sell Your InvoicesInvoice factoring is a great way to enable a business to grow. If you decide to sell your invoices, be sure you understand the discount rates, fees, any other charges, and procedures prior to starting. These are clearly spelled out in the contract; if you don’t understand at least these parts of what you’re signing, stop! Be as educated as you can about what you are doing, and about Allegiant, right from the beginning. If you have any questions, just ask! Make sure your questions are answered in terms you understand and that you are confident working with us will help your business.

Call us at 866.377.0800 to get the cash you need today by INVOICE FACTORING with Allegiant Business Finance.

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